Compost Wholesalers presently uses a public warehouse agreement to finance most of its inventory.  The average amount of inventory is $4,000,000, the bank will loan at 5.5 % per annum for the 6-week loan.  The loan amount will be against 70 percent of the value of the inventory, and the public warehouse fee is $2,500 per week.  Total transportation cost for the loan period is 1.5 percent of the average value of the inventory [that is, (0.015)($4,000,000)]. Find period rate Find m Find the annual percentage rate (APR) Find the effective annual cost (EAR)

Mahrouq Technologies buys $14,962,649 of materials (net of discounts) on terms of 5/30, net 60, and it currently pays within 30 days and takes discounts.  Mahrouq plans to expand, and this will require additional financing.  If Mahrouq decides to forego discounts and thus to obtain additional credit from its suppliers, calculate the nominal cost of that credit. Answer in % terms to 2 decimal places (no % sign).

(Cost of factoring) MDM Inc. is considering factoring its receivables. The firm has credit sales of $300,000 per month and has an average receivables balance of $600,000 with 60-day credit terms. The factor has offered to extend credit equal to 89 percent of the receivables factored less interest on the loan at a rate of 1.3 percent per month. The 11 percent difference in the advance and the face value of all receivables factored consists of a 2 percent factoring fee plus a 9 percent reserve, which the factor maintains. In addition, if MDM Inc. decides to factor its receivables, it will sell them all, so that it can reduce its credit department costs by $1,200 a month. a. What is the cost of borrowing the maximum amount of credit available to MDM Inc. through the factoring agreement? Note: Assume a 30-day month and 360-day year. b. What considerations other than cost should MDM Inc. account for in determining whether to enter the factoring agreement? The cost of borrowing the maximum…

Libscomb Technologies' annual sales are $6,750,624 and all sales are made on credit, it purchases $3,062,806 of materials each year (and this is its cost of goods sold).  Libscomb also has $571,915 of inventory, $1,475,000 of accounts receivable, and $1,400,000 of accounts payable.  Assume a 365 day year.   What is Libscomb’s Receivables Period (in days)?